March has finally arrived. The month in which Somerset start playing cricket again (notwithstanding yesterday's snow on the Quantock Hills). And the month in which the Government is seeking to invoke Article 50 to commence the process of withdrawing Britain from the EU.
We also have the small matter of next Wednesday's Spring Budget. This Budget in particular will be scrutinised very carefully by media commentators and critics seeking to predict the likely economic health of "UK plc" post Brexit.
Some upcoming tax changes have, as usual, been previously announced - for example, the reduction in the corporation tax rate to 19% from 1 April, and the introduction of the inheritance tax additional residence nil rate band from 6 April - the first step in the Government's aim of achieving a £1m inheritance tax exemption for married couples by 6 April 2020.
So far as possible announcements next week are concerned, I have a few predictions.
1. It remains the case that individuals operating via companies pay less tax in overall terms than employees or the self employed. So, as I suggested in a previous article, I think there is a real possibility that the Government could increase dividend income tax rates - currently 7.5%, 32.5% and 38.1% - with effect from 6 April 2017.
2. Self-employed individuals pay less in National Insurance Contributions than employees - at a rate of 9% compared to 12% on income between £8,000 and £43,000 in broad terms. It would be relatively simple for the Government to increase Class 4 (self employed) NIC to 12% with effect from 6 April 2017. More and more individuals are becoming self-employed in the so-called "gig economy" and the Government will be looking carefully at the tax it wishes to generate from this expanding group of the tax-paying population.
3. The Government wishes to encourage more individuals to get on to the property ladder. The current 28% CGT rate for residential property acts as a disincentive for property owners to sell up. Will the Government maintain this 8% "surcharge" given that gains on most other assets including commercial property and shares have been subject to a top rate of 20% CGT since 6 April 2016?
4. Many businesses are facing significant increases in Business Rates from 1 April 2017 and it is to be hoped that the Chancellor will announce enhanced relieving measures for smaller businesses next week.
Finally, I would hope that the Government will further enhance the corporation tax incentives available for companies undertaking R&D in the ICT / cyber security and other sectors.
We will all have to wait to see what is announced next Wednesday lunchtime but whether or not my predictions turn out to be accurate I am not anticipating a "quiet Budget"...
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